DuluxGroup stops paint supplies to Masters

DULUXGROUP has stopped supplying its premium paint and woodcare products from Masters and Danks corporate stores to work more closely with other partners.

The decision was in response to US-owned paint competitors becoming more closely aligned with particular resellers in Australia, the company said in a statement on Thursday.

"Dulux Australia has determined that, by doing the same with its key retail paint channel partners, it will put itself in the best position to compete strongly against its competitors and maximise sales of its key paint brands over the long term," DuluxGroup said.

DuluxGroup said premium paint and woodcare products including Dulux and Cabot's would no longer be sold at Masters and Danks corporate stores.

Total paint sales to Masters and Danks represented about one per cent of total sales and the decision was not expected to have a material effect on the company's financial performance, DuluxGroup said.

The Masters hardware chain - a joint-venture between Woolworths and US-based Lowe's Companies Inc - competes with Wesfarmers-owned Bunnings, which is the market leader in the Australian home improvement market.

In 2011, Bunnings stopped stocking paint from US giant Valspar, including leading Australian brand Wattyl, instead giving over more shelf space to products from rivals Dulux and Taubmans.

Valspar is the major supplier of paint to Lowe's hardware chain in the US, and also supplies paint to Masters in Australia.

At 1535 AEST, DuluxGroup was down 20 cents, or 4.17 per cent, at $4.60.

Woolworths said the decision by DuluxGroup would free up paint-category space in its stores that presented it with scope to provide additional growth opportunities to Wattyl, the leading paint brand in its business.

Woolworths also said it would introduce more innovative products and international brands to the Australian market, particularly Valspar which was an exclusive supplier to its US joint-venture partner, Lowes.

Valspar has already established an Australian manufacturing base.

DuluxGroup's decision does not include Dank's independent store network, which would continue to stock Dulux paints, Woolworths said in a statement.

Woolworths said it had been anticipating Thursday's announcement by DuluxGroup.

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